What will fuel the next BTC rally is always an unknown. History has shown that Bitcoin rallies are often built on strong fundamentals and technical. So, one has to study both the macro events as well as technical charts.
The JPMorgan ‘Flows and Liquidity’ publication aims to deliver clear insights to its clients and investors regarding assets across various categories. The note says that Bitcoin has significant upside potential and also calls BTC a ‘risk asset.’
JPMorgan highlights the rising popularity of BTC as a safe asset
The ‘Flows & Liquidity’ remains one of JPMorgan’s premier publications with a considerable readership. The report also highlights that Bitcoin is not yet a full safe-haven asset, and it would be right to call BTC a ‘safe’ asset because of the rising BTC-S&P500 correlation. Here, it must be mentioned that Bitcoin is now closely following the S&P500 index’s movements in its daily price action for the past few months.
The report further highlights that Bitcoin’s safe-haven credentials emerge from its ‘alternative currency’ characteristics. Gold has centuries of history to back its safe-haven credentials. The volatility of gold remains far less compared to Bitcoin, especially during economic turmoil.
Rising gold prices will ultimately benefit a bullish BTC rally
The millennial investor believes Bitcoin to be a competitor of gold when it comes to alternative assets. Bitcoin derives its value by projecting itself as an alternative to traditional finance. The report mentions that it competes with gold for the ultimate status of an alternate currency. The rising interest of millennial investors is helping fuel the BTC rally.
The millennial investor is rising in ranks to become a vital component of the investor realm. As the purchasing power of the millennial investor rises, so does his interest in cryptocurrencies. The market capitalization of Bitcoin must rise exponentially to compete with gold on its traditional turf.
The report says that even if the competition between gold and Bitcoin heats up modestly, the price of Bitcoin would have to rise considerably to give a befitting fight to gold and create a BTC rally. Furthermore, the report also highlights how the traditional investor is now more open towards crypto investments.